High-Tech Startup Lifecycle in India : An Exploratory Study of the Determinants of Emergency, Survival and Growth

Abstract

Of late, technology entrepreneurship has been receiving growing importance as a means of contribution to national economic growth, both from Empirical Researchers and Policy Makers. According to NASSCOM, India has emerged as the third largest base for high-tech start-ups in the world. Although there is a surge in start-up creation rates in India, very little is known about the vital factors that are required for these star-ups to survive, sustain and grow into large enterprises. This study reviews the entrepreneurial, firm-specific and external environment specific aspects that influence the key lifecycle stages of high-tech star -ups and identifies the key factors that influence each of the milestones. There are very few studies in this domain that have examined the unique features and influential factors of different lifecycle stages of start-ups in the context of emerging economies like India. This limited exploration on the structure, process and strategies adapted by high-tech start-ups has resulted in insufficient understanding about the high-tech start-up lifecycle. This study therefore, attempts to fill these gaps. Accordingly, the objectives of this study are to determine the factors that influence the creation, survival and growth of the high-tech start-ups operating out of India. Further, an examination of what factors influence and impact the entire lifecycle of high-tech start-ups is also carried out – to obtain an integrated perspective on the lifecycle of high-tech start-ups. Primary data gathered from 275 high-tech start-ups, operating at different stages of the lifecycle formed the basis of the present study. To obtain additional insights on the factors influencing the milestones of the high-tech start-up lifecycle, the available data are analyzed against three segments – based on the target market segment that these start-ups focused on (B2B or B2C), based on the region of operations of the start-ups and based on whether the founding team had transnational work or start-up exposure or not. Our findings indicate that age and technical education of the entrepreneurs (from entrepreneur-specific perspective), the R&D and financial capitalization capabilities of the start-ups (from firm-specific perspective) and the external ecosystem parameters such as a robust SDP growth rate, presence and occurrence of VC funded deals in the region of start-ups operations have an influence on the high-tech start-up lifecycle in India. The findings of the study formed the basis to derive implications for entrepreneurs, other ecosystem stakeholders and policy makers.